St. Paul businessman figures in Perez hearings for U.S. Labor Dept.

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May 6, 2013 - 3:40 PM

Thomas Perez

The congressional battle over Labor Secretary nominee Thomas Perez has put a national spotlight on a St. Paul businessman whose obscure whistleblower suit against city officials has dragged on in federal court for nearly four years.

Frederick Newell hasn’t had much luck in court so far. But congressional Republicans have championed his cause, inviting him to tell his story Tuesday to a joint House committee looking into allegations that the Obama administration abandoned his lawsuit in order to help St. Paul in a separate housing discrimination case.

The alleged mastermind of what Republicans are calling an improper “quid pro quo” is Perez, a top Justice Department official whom President Obama has tapped to head the Labor Department.

While Labor appointments can be sleepy affairs in Washington, Newell’s case, which was dismissed by a federal judge last summer, is getting new life in the political arena. Republicans hope to show that whatever the merits of Newell’s claims, he fell victim to behind-the-scenes Justice Department maneuvering to head off a Supreme Court challenge to four decades of federal housing discrimination law.

Among the players in the deal was former Vice President Walter Mondale, who sponsored the landmark Fair Housing Act as a U.S. senator from Minnesota in the 1960s. He and other civil libertarians grew concerned last year when they drew out the likely legal ramifications of a lawsuit brought by Twin Cities’ area landlords who contended that St. Paul’s strict code enforcement depleted the city’s housing stock for minorities.

Considering the increasingly conservative tenor of Chief Justice John Roberts’ Court, Mondale and some inside the Obama administration encouraged St. Paul Mayor Chris Coleman to drop the city’s petition, which they feared could upend the theory of “disparate impact” – the idea that discrimination doesn’t have to be intentional.

As an enticement, House GOPers contend, the Justice Department agreed to stay out of Newell’s suit, which accused St. Paul officials of fraud in some $200 million in federal housing grants for low-income workers.

St. Paul and federal officials argue that Newell’s suit, like the landlords’, had no merit.

Look for more coverage in the coming days as Newell heads to Washington.